As we approach the conclusion of Greece’s referendum today to see what “The People” think about the European Union’s bailout package in the face of that recent International Monetary Fund’s bombshell&more on that shocker later—I want to crystalize the issue at hand in familial terms.
After taking a household salary cut to get a loan, do you think that acquiring more debt while taking an additional reduction un your pay will ever get your household out of debt?
What if your household debt level was so high that whether or not you starve your kids and grandparents, repayment is impossible unless your creditors settle for a reduction in the amount owed?
Besides, there’s a strong reason to believe that your creditors knew about your inability to pay all along.
And what if your creditors presented you with an ultimatum: take more debt—plus that additional salary cut— or have your remaining money frozen or removed from your banks. What would you do?
Greece is that kind of problem, with additional complications.
As I said before, austerity has been a nightmare for Greece. The IMF admitted that a long time ago. And although the Troika insisted that Greece implement austerity measures to accept a loan the country could not repay in order to pay for a loan the country could not repay (reread that), the evidence clearly shows that cutting Greek salaries, pensions and government spending while raising taxes became an economic and social failure. Well, at least a failure for Greece…
Removing or restricting a country’s ability to generate wealth will never allow it to create sufficient financial strength to pay an unsustainable debt load that was attributed to the ineptitude of previous Greek government administrations, and the greedy bankers who issued those loans while understanding that Greece did not have the ability to repay.
Plus, the EU government is guilty of having bankers’ tunnel vision, coupled with lapdog syndrome. When the possibility of Greece defaulting on its debt became clear, the EU used taxpayer money to bail out Greece—money that was then used to pay back the private European banks who made these loans to Greece.
Just like the 2008 mortgage meltdown, the private banks made bad loans, wanted full financial restitution—even in the face of their mistakes—and was able to turn a private banking problem into a continent-wide public crisis.
On top of that, the EU is leading the strong-arm tactic forcing Greece into additional strangling economic reforms—as if a bank cares about grandmothers jumping out of windows because they can’t afford food—and ignoring Greece’s proposals for debt relief.
In Oligarchy Land, the banks win when they lose.
This is what makes the IMF’s recently-released Debt Sustainability Analysis report concerning Greece a bombshell.
It appears that the EU has been trying for months to block an IMF report which shows that Greece will never repay its loans without debt relief.
Debt relief. Like, accepting less than the loan principal or something like that. Crazy talk in Oligarchy Land.
The IMF’s motivation aside, the EU’s attempt to block this news for months indicates dishonesty, at minimum.
But the EU freezing Greek banks’ access to funding as a way to force Greece to accept more debt and austerity is sinister, and makes me wonder if the EU has additional objectives—other than to make Greece a debtor nation and public infrastructure fire sale event for the rich.
Perhaps the EU wants to ensure that Greek Prime Minister Alexis Tsipras’ Syriza government never succeeds, and that the Euro survives…
song currently stuck in my head: “over and over” – sylvester