(THIS ARTICLE IS MACHINE TRANSLATED by Google from Norwegian)
In an 3000 year-old account of Jeroboam of Israel, son of King Solomon, it is said that the Israelis pleaded with their new king to escape the yoke that his father had "thrown around their necks". History tells us that this year was the cost of maintaining the political establishment. For the Israelis, the treasure of their work symbolized inhuman sacrifice, and was experienced as a theft of their possessions – a reduction from man to "beast" (hence the term "beast of burden").
History tells that Jeroboam promised to consider the people's desire. He apparently discussed the matter with his ministers, who did not unexpectedly oppose this. How else would the ministers and bureaucrats retain their privileges? The end of it all was that Jeroboam told the Israelis the following:
«While my dad put a heavy yoke on you, I would double this yoke. As my father chastised you with whips, I will chastise you with scorpions.»
In Greece, the EU political power elite uses slightly more sophisticated methods to humiliate and rob the Greek people.
A squeezed lemon. The first crisis in Greece was in 2010. The next came in 2012. The EU, the International Monetary Fund (IMF) and the European Central Bank (ESB, popularly called the "troika") introduced rescue packages. Greece was not saved. Private Greek and international banks were rescued. The rescue operation meant that unsuspecting Greek taxpayers were left with the debt to the private banking sector. The Greek people were pushed into the role of debtor by Greek and European politicians, and they were asked to save and pay more taxes. In Greece, it took six years before a corrupt European political and banking system cracked down on the Greek people. (Previously mentioned in Ny Tid 15.06.2015, «The coming economic collapse».)
Greece is like a squeezed lemon. Gross domestic product (GDP) is € 180 billion. The public sector, which supplies tax assets, accounts for 60 per cent of GDP. This means that the private sector accounts for € 70 billion, which represents value creation. Only the private sector pays tax. Total public debt is close to 500 billion euros – not 320 billion, as most claim. In short, a value creation of EUR 70 billion in the private sector will serve a debt of EUR 500 billion. The debt / GDP ratio is in fact 280 per cent.
Assuming that debt grows by 5 per cent a year (and this is probably too good), it means that GDP must grow by 14 per cent just to keep up. It's an impossibility. It is part of the story that in 2010 the EU stated that Greece would be out of the crisis by 2014. Much further from the truth it is difficult to come by.
Reverse Robin Hood. What does Greece and the Troika negotiate? The negotiations are about saving the EU politicians, the EU and the IMF at the expense of the Greek people. The proof of this is that politicians will "give with one hand and take back with the other", ie a skin maneuver. Greece immediately needs another 10 billion euros. The conditions are very harsh, and they fall on the Greek people. However, the money is not intended to help the Greek population, as the troika will immediately demand the same € 10 billion to pay off repayments and interest on existing loans granted to Greece. An additional $ 50 billion "rescue packages" stand in line. Continuing this debt spiral, eventually European taxpayers end up with the bill because the Greek people will never be able to settle for it.
What politicians and central banks are doing is the opposite of what Robin Hood did. Corrupt and irresponsible politicians want to save their own skins. The people must bleed, so that European politicians do not have to take responsibility. Just as Jeroboam chastised the Israelites 3000 years ago, European politicians will chastise the Greek people today – and the European people tomorrow, when the Greeks are no longer plundering.
Corrupt and irresponsible politicians want to save their own skins.
The Greek people have two choices: take on more debt to keep their creditors at bay for a while, and live a life of total humiliation and poverty – or spend the few money left in the cash to secure a minimum living basis and dignity for an impoverished population. Is it any wonder that the already lousy tax morality of the regular Greeks is even worse today, when they have been plundered for a long time by both their own and Europe's political power elite? Why throw good money after bad?
The left-wing coalition with Prime Minister Akexis Tsipras in the lead has said so in an official statement:
"In the past four months, the EU, ESB and IMF governing bodies have been aiming relentlessly and purposefully at stifling the economy and milking the country's financial reserves for their last drops – as well as pushing a vulnerable government to complete submission and humiliation to terror and warning."
It's hard to disagree with him.
The federal Europe. The Greek tragedy is a big game about the politicians' ability, willingness and dream of a centrally controlled and federal Europe. The effort right now is the dignity and right of the Greek people to a decent life, versus the struggles of EU politicians and bureaucrats for their own political lives. It's like choosing between plague and cholera, because politicians know that if they make concessions to Greece, Spain, Portugal, France and the other countries of Economic and Monetary Union (EMU) are in line with the same kind of debt problems. If they choose cholera, they risk Greece – voluntarily or involuntarily – being forced out of EMU, with ripple effects across Europe.
The Tsipras government believes it is time for Greece to be released from a debt prison that is constantly receiving more debt prisoners. The troika does not want it to happen, due to the danger of the debt pyramid cracking and being made clear to the European people.
But who loses the most on a grexit? What is little known is that it is probably the European Central Bank (ESB) that has the most to lose if Greece leaves the euro zone. Mainstream media puts Greek government debt at 315 billion euros. In addition, the ESB has loaned the Greek banking system EUR 115 billion through the Greek central bank to compensate for capital flight and bankruptcies. The ESB also has outstanding 27 billion in government bonds. In total, the EU is exposed to approximately 142 billion euros – with sacks and draws close to 170 billion euros. If the ECB withdraws this funding and demands repayment, the Greek banks go bankrupt. The Greek central bank is following suit. If Greece withdraws from EMU, the result is the same. Therefore, the funds are in fact lost to the EU.
The € 142 billion that the ESB has provided to the private banking sector in Greece has come in the back of its mind and in hiding – that is, in violation of democratic processes. Had it not been for the acclaimed German economist Hans Werner Sinn's disclosures about this, the ESB might have managed to keep it hidden for a while. The EU's exposure to Greece, in effect, means that the equity in the EU is lost. Cracking Greece, gets Governor Fed Draghi is a problem, because he has to explain about the ESB's inability to pay and the losses this and the Greek debt inflict on the European people.
A return to drachmas can prepare and carry out Greece in a few days.
One problem that is often overlooked is that all of Greece's loans follow British law – and that the loan agreements contain one cross default-clause. That is, if Greece defaults on one loan, all loans by default are defaulted. Then, under international law, the creditor is obliged to book these loans as default, and with it take losses. It is this central power in Brussels that is most feared. Simply because countries like Portugal, Spain and Italy will eventually require the same treatment as Greece. All these nations have strong anti-EU movements.
Drachmas. But the clueless Greeks have already maneuvered the troika. A return to drachmas can prepare and carry out Greece in a few days. When this is done, one would think that Greece will immediately have an import problem due to a lack of foreign exchange reserves. This is normally a serious problem, as essential items such as food and medicines can become in short supply – something that they already have. However, for Greece this should not be a problem, as they have already outmaneuvered their creditors.
The smart Greeks, and many of them, have already taken into account a Grexite. The capital outflow of the above 142 billion euros from Greek banks means that the Greeks have "taken out" euros equivalent to 79 per cent of the Greek banking system. Greeks have 43 billion euros in cash and 99 billion euros in foreign banks. In a grexit, the ESB will lose its coverage of the above capital flight. The Greeks, on the other hand, got their money out in time – before the Grexite – will then sit with loans denominated in drachmas and deposits in euros, for example in Deutsche Bank. Suppose that drachmas are devalued by 50 percent against the euro – and then half of the loan is gone, and the euro can be converted into drachmas to pay off loans and buy cheap assets in Greece.
The mainstream media obviously doesn't understand this. Neither do the politicians. But the Bank of Greece balance does not lie. It shows that € 142 billion has fled or hidden. Greece – or rather the smart Greeks – has in some way out-maneuvered the EU, the IMF and the EU, and can hold the key to a less painful – perhaps even good – solution for the Greek people.
Undone bombs. It is also inconceivable that Tsipras and Putin enter into more long-term political and economic cooperation, and that necessary assistance during a transitional period comes from Russia. Contrary to what the press largely writes, Russia has a relatively good economy (only around 15 per cent government debt), and suffers less from the sanctions than the Western press should.
Greece will have to sit down and negotiate the defaulted debt of around € 500 billion, but here the troika will soon have a bigger problem than Greece – and thus an incentive to come to an agreement. The question then becomes how far the troika dares to go before it incurs other debt-burdened nations, such as Spain, Portugal and Italy, all three of which are Euro skeptics and internally discussing an exit. This discontent, of course, can also spread to other countries in the eurozone, especially when taxpayers in Germany and France, among others, find that they are left with the bill after politicians' eleven-year economic experiment.
There are many undone bombs in a grexit, because the EU, ESB and IMF pyramid schemes with the Greek and European people's tax money and welfare schemes will be revealed to European taxpayers. Then they suddenly have to deal with realities. For example, German citizens must make a loss of EUR 92 billion, French citizens EUR 70 billion, Italian citizens EUR 62 billion and Spanish citizens EUR 43 billion.
The smart Greeks, and many of them, have already taken into account a Grexite.
What will the people of Europe say to this? What confidence is the EU, EU and IMF left with when this insane political experiment and reverse regime – staged to save the troika and politicians – is exposed in all its misery? The overwhelming positive of a Grexit will be that the Greek people will once again have the opportunity to influence their own situation as an independent nation. A hard-working Greek people will eventually be able to produce goods and services at reasonable prices in their own currency, and open up for an upswing in exports and ditto foreign exchange earnings. The Greeks get a new chance that will be painful, but which can create prosperity if used wisely – and thus also create pride and dignity for the Greek people. They deserve this opportunity, and should not give in to pressure from the EU, the ECB and the IMF.
A historical lesson. To help the Greeks with the decision, it may be useful to recall the irreconcilable attitude shown towards Germany after the First World War. In a way, this is the same irreconcilable attitude that EU politicians show towards Greece today. Under the Treaty of Versailles, Germany was subjected to significant war reparations that proved impossible to comply with – it became like an anchor around its neck. Economist John Maynard Keynes, who had been part of the British delegation in Versailles, withdrew in protest of the harsh conditions, and later published a book in which he pointed out that such extensive damages would be devastating to the entire European economy. The French general Ferdinand Foch stated the following about the treaty: "This is no peace! This is a twenty-year ceasefire! ” That was a pretty clear and far-sighted conclusion. The general understood that a lasting humiliation of the German people, no matter how rightly this was considered by the victors, seldom ends well. Europe eventually got Hitler and the war General Foch warned about. It is perhaps an idea that the Greek people stand up against the power elite in the EU and say that enough is enough. Then we can instead write a "festival script" for the Greek people.