Global Independent Analytics
Van Gelis
Van Gelis

Location: Greece

Specialization: Middle East

Greece and the Euro: A Marriage Made in Hell. Part 1

The initial mythology regarding Greece’s entry into the then named EEC (European Economic Community), was that Greece would develop economically and become like the advanced countries of Northern Europe.

It’s an irony of history that Socialist PASOK spent the 1970’s outflanking the Communist KKE on the Left by marching on the streets with two key slogans: ‘Greece for the Greeks’ and ‘EEC and NATO are the Same.’  By the time the EU’s single currency was wheeled out for Greece, it was being de-industrialised and indebted at such a rate that, when the IMF arrived, it essentially went into a permanent coma from which it will never recover, despite all the propaganda to the contrary (Finance Minister Stournaras’ ‘Grecovery’ of 2014 and Syriza’s announced economic recovery of autumn 2016).

The old Greek nation-state was blown apart by a NWO transnational elite and turned into Europe’s first fully fledged debt colony, tied to a currency that would usher in depression economics, after the initial euphoria - based on cheap credit with no sustainability linked to it in the long term – had vanished. This isn’t a story of productively re-modernising a country, but blowing it up and turning it into the economic equivalent of Detroit in the Mediterranean, a post-industrial post-jobs hellhole, where the walking dead scavenge in dustbins for food, have no reason to exist, and so many indeed have chosen not to, committing suicide in the most public of ways1.

Single Currency

The single currency is part of a wider capitalist neoliberal project based on the EU’s four core principles: freedom of movement in capital, goods, services and people. The aim, of course, is creating a United States of Europe modelled on the USA.

The idea of a unified capitalist Europe is not new. It existed and was debated in the first two decades of the 20th century2.  Nation-states under capitalism had outlived their productive role and like the national companies of old, got gobbled up by bigger economic and military powers. Europe, with its idiosyncratic history, saw wars as the solution to its differences, led to two world wars and never managed to create a unified capitalist state. As noted by Lenin almost a century ago, if it were to happen, it would be an ultra-reactionary outcome. How can 28 EU nations with different languages, different histories, and above all different levels of economic development, be merged into one, without any democratic accountability or even agreement by the people that make up those same nations? Capitalism in its birth created the modern nation-state. In its decay and decline it is blowing it up.

The 19 member Eurozone hasn’t as yet become 28 (the total current EU members), but attempts are being made for that to occur3. With 9 non Euro currencies - approximately a third of the EU - the disparities in national minimum wages, levels of taxation, and prices between all members, are so large that the EU project is more like one of those large bananas one sees on a Mediterranean holiday crashing in the sea, when drunken revellers get on one and topple over.

From the moment the Soviet Union collapsed, East Germany was consumed by West Germany, and the Ostmark was bought at a rate of 1 to 1 (when the real rate was around 1 to 6) - this cost was immense and would destroy the post-war German economic miracle. Throughout the 1990s Germany run budget deficits, and this cost would have to be borne by someone, as the rules of the EU meant countries with the largest population had a bigger say, and via the vehicle of Brussels the historic relationship of Germany and France (which was actually solidified during World War II) ensured that when the single currency was introduced, it would benefit the core - not the less economically developed periphery. Contrary to popular perception, the EU is not a charity. It is an economic big business empire. It would be a fallacy to believe that small countries like Greece would benefit one iota from joining it4.

When Greece adopted the Euro at an exchange rate of 1 Euro to 340 Drachmas it meant everything produced in Greece was expensive, and imports were priced cheaper. Greece entered at a high exchange rate much like East Germany. With cheap credit in the early years of the Euro it became cheaper to import and sell than to produce. This evaporated wages from the domestic economy due to layoffs, and fuelled a debt import boom.

The moves towards the single currency were stillborn from day one, when the big three powers, Britain, France and Germany, didn’t get an agreement and the sterling was crashed out of the Exchange Rate Mechanism in the early 1990s. Hence the Euro never was a real single currency of a unified European Federal state. What was being attempted at was a political union ahead of an economic and military union (while the latter two had abysmally failed before). With the arrival of East Europe into the EU, what we got was a single currency with remaining national currencies in a whole series of states. This in turn would trigger massive population movements to the West, i.e. to countries with ‘hard’ currencies as the Euro or Sterling (for instance, the UK opened its borders to Polish workers before France and Germany did).

Goldman Sachs and the Euro in Greece

Greece was brought into the single currency by economic shenanigans, the likes of which were organised in Brussels and Washington, using the current Gods of finance Goldman Sachs. It wasn’t so much as requiring Greece to be in the single currency, but ensuring it became a pole of attraction for cheap labour throughout the countries that border it which had an anti-NATO past, and shared Greece’s geopolitical location. Financial re-engineering (infamous Swaps by the Simitis government of PASOK5) and NATO go hand in hand. One can only recount the destruction of Yugoslavia in the early 1990’s as a blueprint for what would happen next.  Like crack dealers in nightclubs, the first drugs are free, and once hooked on finance, you would end up selling everything you own for nothing. This is an old tried and tested method, pioneered from 19th century in the Opium Wars by Britain against China. Greece had nothing to gain from joining the single currency and everything to lose.

Low interest rates placed initially to encourage borrowing at the start of the 2000 decade but then a tripling of them by the end. With no real welfare state, bankruptcy would literally mean just that: losing everything. The Greek population would pay the price of the profligacy of the banksters and their get-rich schemes.

NATO and the Olympic Games

This is a story of a small country, which like a local bar owner visited upon by the city boys of the mafia in a shakedown, had to spend to be ‘protected,’ otherwise the bar would be smashed up. Not paying your fees guarantees instant destruction, but paying eventually leads to economic destruction. Either which way, one cannot escape the vice-like grip of the globalist cartels. The smaller you are - the bigger your problems.

Between 1974 and today, Greece has spent between 200-300 billion euros on arms6,  making it one of the largest spenders on earth. At the same time, its secondary schools in the Greater Athens region are shared in two shifts (morning and afternoon) as not enough were ever built. As for hospitals, even before the IMF’s shock doctrine roadshow made its appearance, they were wholly inadequate to service the population.  Now they simply don’t exist for half the public. Like every banana republic in history, being sold submarines that don’t work by Germany, only reaffirms the story that protection rackets always work with political elites - who take pride in personal enrichment above all else. One can argue that this is probably why they are in the neuralgic positions, as the saying goes, excrement always floats to the top. It certainly did, in more ways than one.

Greece was the smallest country ever to take on board (Coca Cola’s) Olympic Games - the financing of which crippled the Greek taxpayer, (many Greeks were banned from working on Olympic projects as black market labour was favoured). Being part of NATO also meant that due to previous agreements (matching Turkey’s arms spending by 70%), Greece would be bankrupted mathematically once all the infrastructure projects had finished, and no real benefits were accrued to the basic Greek economy of the Greek worker7. Infrastructure projects which emphasise only infrastructure for export-led growth, mean modern ports but decrepit old hospitals, and modern airports - but no proper housing for the masses. Massive amounts of money were funnelled abroad by the rich who were bribed by foreign corporations for government contracts (for example: infamous arms’ scandals by ex Defence Minister Tzohatzopoulos (PASOK) and Siemens’ infrastructure contracts). In the same period of history, Greek tourism, which was a mainstay of foreign income in the 1980’s and 1990’s, saw a concentration of capital via the mass building booms of the early Euro years, creating four times as many hotels in many locations - which were supposed to be filled by foreign tourists.

If Greece had remained with the Drachma it could have competed well with all its geographical neighbours that had a local currency: Bulgaria, Albania, and Turkey, and even with non-geographical neighbours, like Italy. The Wall Street crash of 2007-08, the collapse of the dollar, and the rise of the Euro as an alternative world currency, led to significant price rises. Any alleged gains from the Olympic and Euro football effects of 2004, disappeared in the 2000 decade, and were only arrested after the Arab spring of 2011 (by the collapse of Egyptian and Tunisian tourism), but not in any fundamental manner (despite the allegations of 24 million tourists in 2014 - tax receipts are down), as structural changes occurred in the tourist economy (less employees, more cheap labour with the advent of Eastern Europe, bigger foreign-owned hotels with all inclusive package deals).

Eurocrisis Roadshow and the IMF

Papandreou (PASOK) was elected in 2009 with a big share of the vote (in the mid 40%). By the time he was booted out, his party had become a rump. His electoral promise was ‘We Have Money,’ but he didn’t explain by that that he would raid people’s wages and pensions. His first act was to destroy the South Stream gas project from Russia and that indicated that he would then follow a clear American NWO path.

The US crash of 2007-8 was real, the costs of the double occupation of Afghanistan and Iraq were too much to bear with no actual dividends, and this materialised in the US selling junk bonds to finance its deficits due to its role as the world’s ruling hegemon, leading to a global meltdown and the collapse of the dollar. By 2010, something had to be found to stabilise the flight from the dollar.  PASOK’s leader Papandreou seemed to have fitted the role neatly, being a US citizen by birth. Like a used car salesman who can’t offload dodgy cars, he turned little Greece into a giant ATM for the global financiers. Suddenly the Greeks were the centre of all evil known to man, not Wall Street or the City of London. The Greek plumber having forgotten to issue a receipt had turned the world economy to excrement.

Greece’s fiscal deficit for 2009 would be 12.7% of GDP, double what the previous government had projected, which was around 6%. Then this same figure would be revised upwards to 15.4%, using the Greek statistical services ELSTAT8. This made Greece number one in the EU, though not number one in total debt. It’s economy was never more than 2% of the whole of the EU, and to allege that the 2% created a Euro crisis is beyond a joke, but that is what was sold by the corporate media who are part of the system of financiers.  Total EU debt in 2010 was around 10 trillion euros, while Greece’s was in the hundreds of billions. Illuminating for anyone who wants to chart the rise and fall of the Dollar in relation to the Euro from 2008 till today is the fact that whenever the Euro appreciated too much we had an exacerbation of the Greek Euro crisis. Greece became the non-existent WMD of the Euro crash.

Bailout after Bailout to keep the Euro afloat

Three bailouts later, the budget deficit nears 200% of the GDP (from 120%), and total Greek debts (domestic and external), are around 1 trillion euros. Instead of alleviating the crisis, the Troika that took over just lit a fuse that detonated the Greek economy. From around 13 banks we are essentially down to 4 and they are all foreign owned now (as of December 2015).

Around 40% of the population (official and unofficial), are unemployed, wages and pensions have had on average a 50% cut, and the only discussion that ever exists is how low can everything go. Indeed: in an EU with different interest rates for Euro economies (negative in Germany and 2% in bankrupt Greece), minimum wages which vary from over 2,000 euros in Luxembourg to as low as 200 euros in Bulgaria, (or to 150 euros in non-EU Albania which has had open borders with Greece since 1992), Greece has now been in depression for more years in ‘peacetime’ with the Euro than any other currency or probably nation in history. One cannot realistically call it a depression anymore but a programme of economic genocide.

Greece allegedly entered the EU to gain competitive advantage in Europe’s wide markets for its agricultural produce. Instead, the exact opposite happened. The EU paid subsidies to Greek farmers to stop actual farming, and flooded the supermarkets with cheaper non-EU agricultural imports. Hence the medium and small farmer went to the wall, and the big farmer was just geared to exports and land - even when not in use - would be taxed to pay parasitical financiers. Steel, cement and ship repairs all went to the wall, and all the basic manufacturing plants of the 1970s (buses, armaments, fridges) were destroyed. Borrowing bank-issued credit to stay afloat became the new unique selling points of politicians. Every bailout would save the Greeks and every new bailout would make the situation worse than the one before.

In the 2nd part of this essay we will look at the Euro and at how the main political parties relate to it, what they propose in terms of productive reconstruction of the devastated Greek economy, whether there can be hope within the Eurozone, and the issue of Debt.

Endnotes

  1. Syntagma Square Public Suicide
    http://imfoccupationgreece.blogspot.co.uk/2012/04/greek-pensioner-commits-suicide-in.html
  2. “In this sense a United States of Europe is possible as an agreement between the European capitalists ... but to what end? Only for the purpose of jointly suppressing socialism in Europe…” - Lenin
  3. Non Euro currencies and Minimum wages in the EU                         
    https://en.wikipedia.org/wiki/Template:Non-euro_currencies_of_the_European_Union 
    http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=tps00155&plugin
  4. Greece (EU Facts and Figures), Mice and Men
    http://imfoccupationgreece.blogspot.co.uk/2012/09/greece-of-mice-and-men.html
  5. Sachs - Simitis Swaps case to Parliament
    http://greece.greekreporter.com/2011/01/11/greek-prosecutor-sends-goldman-sachs-simitis-swaps-case-to-parliament/
  6. Germany’s ‘hypocrisy’ over Greek arms spending
    http://www.theguardian.com/world/2012/apr/19/greece-military-spending-debt-crisis
  7. Olympics triggered Greece’s decline
    http://www.bloomberg.com/bw/articles/2012-08-02/how-the-2004-olympics-triggered-greeces-decline
  8. EU backs Georgiou on Greek Statistics
    http://greece.greekreporter.com/2013/01/23/eu-backs-georgiou-on-greek-statistics/

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