Outside the Greek parliament the Greek people are saying NO the the corporate dictators in the ECB & IMF
The people of Ireland support you Greece!
Outside the Greek parliament the Greek people are saying NO the the corporate dictators in the ECB & IMF
The people of Ireland support you Greece!
I am Irish and have been working in Germany for many years , the Deutsche Bank are as you say at the route of all this financial crises! They are sitting on trillions of derivative losses:( 870 trillion $ worth) they are holding the wrong side ( Loss making ) to trades and insurances just like the AIG in the US: They have gambling debts all over the place and the bought off Irish Government have bailed out these gangsters debts by taking on the debts so Ireland now has 265 billion new debt in 2015 as against 24 billion in 2007! Thus enslaving an entire nation: Just look at the gall of these people trying to force the Greek people to take on more debts to solve a debt problem : Democracy is now at risk and the true Europe and its EURO agenda is exposed to be a corporate dictatorship and nothing else: Stop this blatant robbery of our FREEDOM! England do not make the same mistake! I am ashamed of our Quislings & gobshites in the Irish government as they helped to stab Greece in the Back!But the ordinary people of Ireland are backing Greece!
On 27 February 1953, an agreement was signed in London which resulted in the cancellation of half of Germany’s (then West Germany’s) debt: 15 billion out of a total of 30 billion Deutschmarks.*
Those cancelling the debt included the United States, the UK and France, along with Greece, Spain and Pakistan – countries which are major debtors today. The agreement also included private individuals and companies. In the years following 1953 other countries signed up to cancel German debts, including Egypt, Argentina, Belgian Congo (today the Democratic Republic of Congo), Cambodia, Cameroon, New Guinea, and the Federation of Rhodesia and Nyasaland (today Malawi, Zambia and Zimbabwe). (1)
The German debt came from two periods: before and after World War II. Roughly half of it was from loans Germany had taken out in the 1920s and early 1930s, before the Nazis came to power, which were used to meet payments ordered by the Treaty of Versailles in 1919. They were a legacy of the huge reparations forced on the country after defeat in World War I. The other half of the debt originated from reconstruction following the end of World War II.
By 1952, Germany’s foreign-owed debt was around 25% of national income. This is relatively low compared to debtor countries today: Spain, Greece, Ireland and Portugal’s debts to foreign lenders are all over 80% of GDP. But West Germany had to undertake huge reconstruction following the war, and foreign currency with which to pay foreign-owed debts was scarce. The German delegation at the conference convincingly argued that its debt payments would rise sharply in the near future, and that this would significantly hinder reconstruction. Following the debt cancellation, West Germany experienced an ‘economic miracle’ with large-scale reconstruction, and high rates of growth in income and exports. This stability contributed to peace and prosperity in western Europe.
Creditors to West Germany were keen to stabilise the country’s politics and economics, so that it could be a ‘bulwark against communism’. This unique political reasoning led to creditors adopting a much more enlightened approach to dealing with a country’s debt, which has unfortunately not been repeated in debt crises of the last thirty years – in Latin America and Africa (1980s and 1990s), East Asia (mid-1990s), Russia and Argentina (turn of the millennium) and Europe today. Through these crises, Germany has been a creditor, as can be seen most starkly in the current European debt crisis.
As well as the scale of debt cancellation, there were several other features of the London Debt Accords which were of great benefit to Germany, and the principles of which could be applied to debtor countries today.
Most ingeniously, it was agreed that West Germany’s debt payments could only come out of trade surpluses. If the country had a trade deficit, no payments would need to be made. This meant that it only made debt payments using revenue it had actually earned, rather than having to resort to new borrowing or using up foreign currency reserves. It prevented a return to crisis or long stagnation. If it did have a trade deficit, West Germany was also allowed to restrict imports.
For creditor countries it meant that if they wanted to be repaid, they had to buy West German exports. The mechanism for doing this was that they allowed their currencies to ‘rise’ against the Deutschmark. This meant it was cheaper for their citizens to buy products produced in Germany. This increased German exports, earning the country the money to repay the remaining debt. This effectively meant that creditors had to restructure their economies as well – by importing (ie. consuming more) rather than forcing the debtor to implement austerity.
Deficits, surpluses and debt
If a country is exporting more than it is importing, it has a trade surplus. This means it has left over revenue which is not spent on any imports. It either has to be spent on paying debts, or has to be lent to other countries, creating debt for them.
If a country has a trade deficit, it is importing more than it is exporting. To be able to do this it either has to borrow money from other countries, or sell assets it owns to other countries.
Debts between countries are therefore caused by (or cause) trade deficits and surpluses. If one country wants to have a surplus, it relies on another country having a deficit. The more countries are in balance with each other, the more stable the world economy will be.
In order for debts to be repaid, debtor countries need to have trade surpluses, and countries which are owed money need to have trade deficits. It is very difficult for debtor countries to move to having a trade surplus, if creditors are not willing to also move to having deficits.
It is not theoretically possible for all countries to have surpluses, short of the Earth trading with another planet.
West Germany did indeed have trade surpluses throughout the period of debt payment, and so the clause never needed to be invoked. But its presence helped rebuild the West German economy and export base by giving an incentive for creditors to buy West German exports, and allow the Deutschmark to devalue against their currencies.
However, German competitiveness and under-valuation of the Deutschmark continued following the period of debt repayment, and was ‘locked in’ with other Eurozone countries with the creation of the Euro in the 1990s. Whilst in the 1950s and 1960s West Germany’s trade surpluses enabled the debt to be paid, in more recent decades they have contributed to increased debt in other countries, most notably countries such as Greece, Ireland, Spain and Portugal today.
Given the debt cancellation, and reduction of interest rates, West Germany’s relative debt payments were 2.9% of exports in 1958, the first year for repayments, and then fell as exports grew. In contrast, today the IMF and World Bank regard debt payments of up to 15-25% of export revenues as being ‘sustainable’ for the most impoverished countries.
In 2015, Germany is expected by the IMF to yet again have a trade surplus, of 5.8 per cent of GDP, when it could be buying exports from debtor countries to help get them out of the crisis. Moreover, debt payments are far higher as a percentage of exports than the maximum spent by West Germany following debt cancellation. The Greek government’s foreign debt payments are around 30 per cent of exports.(2)
Heavily indebted countries in the global South are also making debt payments at much higher levels than West Germany did. Pakistan, the Philippines, El Salvador and Jamaica are all spending between 10 and 20% of export revenues on government foreign debt payments.(3) This does not include debt payments by the private sector.
All types of creditor were brought into the restructuring, whether foreign governments or companies. This ensured equal treatment for all, whilst preventing Germany being pursued by companies for double the amount of debt it was paying to others.
This is in marked contrast to debt restructurings of recent years. The Heavily Indebted Poor Countries initiative, which cancelled $130 billion for 35 of the most impoverished countries in the 2000s, only cancelled debts owed to international institutions and foreign governments. Private companies were not compelled to take part. This has led to some of the poorest countries in the world, such as Sierra Leone, Zambia and the Democratic Republic of Congo, being sued in western courts by vulture funds, for huge amounts on debts which they paid very little for.
In late 2001, Argentina defaulted on its debt when it became simply too large to pay. Many of the private creditors agreed to sign up to new agreements where they would be paid 30 cents in every dollar that was owed. However, some holdout creditors, many of them vulture funds who bought the debt cheaply in the midst of the crisis, are suing the now-solvent Argentina for the full value of their debt.
In June 2014, the US Supreme Court upheld a New York court judgement in favour of two US vulture funds, NML Capital and Aurelius Capital, who are seeking $1.3 billion from Argentinian debts dating back to the 2001 crisis. The judgement made it illegal for Argentina to pay any of its debts unless it agreed to pay the vulture funds in full. Argentina refused, forcing it into a new debt default and a stand-off which continues today.
In Greece, two debt restructurings were held in 2011, which resulted in over 90% of private creditors taking a more than 50% reduction in the debt owed to them. This ‘reduction’ was still more than the private holders of the debt would have got if they had sold the debt on the market. And creditors insisted that the new debt was issued under foreign, mainly British law, giving the Greek government much less control over its debt in the future.
Furthermore, creditors who held the old debt under non-Greek law, such as in the UK or Switzerland, were able to stay out of this deal, and are still being paid the full amount, more than double what other creditors are receiving. Again, many of these are vulture funds who bought the debt cheaply and so are making a huge profit out of the Greek people. Moreover, bailouts over the previous couple of years mean much of the Greek debt has been transferred away from being owed to banks and to public institutions such as the IMF and EU governments instead. This debt was exempted from any reduction, and so Greece’s foreign-owed debt is now well over 100% of GDP.
The London Debt Accords addressed all debts owed by the West German economy to people, governments and companies in other countries. It therefore included debts of German individuals and companies, not just those of the government.
Much of the debt crisis today has been caused by debts owed, at least initially, by private companies, especially banks. For example, borrowing by Ireland’s private sector led to the foreign debt of the country as a whole reaching 1,000% of GDP by 2007. In contrast to the reckless lending and borrowing of the private sector, the government had a budget surplus during this time, and its total net debt – owed to both Irish savers and foreigners was down to just 11% of GDP by 2007.
For an economy to escape from the stagnation caused by debt, the debts owed by both governments and private companies need to be addressed.
If West Germany did not, or was unable, to meet debt repayments, the agreement said there would be consultations between the debtor and creditors, whilst seeking the advice of an appropriate international organisation. This is in marked contrast to debt ‘negotiations’ over recent years where creditor governments and institutions, such as the Paris Club, IMF and European Central Bank, have dictated terms to debtor countries, and forced them to implement austerity and free market economic conditions. As it transpired, West Germany did not have further problems with the debt, so again the clause never had to be invoked.
Inspired by the ancient idea of jubilee, a time when debts were cancelled, slaves were freed and land was redistributed, Jubilee Debt Campaign is calling for a new debt jubilee in response to today’s global economic crisis. Such a jubilee would provide a framework for tackling today’s debt and banking crisis in Europe, as well as the continuing burden of unjust debt in the global South. It would mean:
Greece is clearly one of the countries most in need of debt cancellation today. After more than four years of austerity, Greece’s debt has risen from 133% of GDP to 174% of GDP. The minimum wage has fallen by 25%, and youth unemployment is over 50%. Plus more than 20% of the 11 million people in Greece are now living below the poverty line. It is vital that Greece’s creditors learn the lessons of Germany’s debt deal of 1953 and break the chains of debt for Greece today.
The Eurogroup Meeting of 27th June 2015 will not go down as a proud moment in Europe’s history. Ministers turned down the Greek government’s request that the Greek people should be granted a single week during which to deliver a Yes or No answer to the institutions’ proposals – proposals crucial for Greece’s future in the Eurozone. The very idea that a government would consult its people on a problematic proposal put to it by the institutions was treated with incomprehension and often with disdain bordering on contempt. I was even asked: “How do you expect common people to understand such complex issues?”. Indeed, democracy did not have a good day in yesterday’s Eurogroup meeting! But nor did European institutions. After our request was rejected, the Eurogroup President broke with the convention of unanimity (issuing a statement without my consent) and even took the dubious decision to convene a follow up meeting without the Greek minister, ostensibly to discuss the “next steps”.
Can democracy and a monetary union coexist? Or must one give way? This is the pivotal question that the Eurogroup has decided to answer by placing democracy in the too-hard basket. So far, one hopes.
Intervention by Yanis Varoufakis, 27th June 2015 Eurogroup Meeting
In our last meeting (25th June) the institutions tabled their final offer to the Greek authorities, in response to our proposal for a Staff Level Agreement (SLA) as tabled on 22nd June (and signed by Prime Minister Tsipras). After long, careful examination, our government decided that, unfortunately, the institutions’ proposal could not be accepted. In view of how close we have come to the 30th June deadline, the date when the current loan agreement expires, this impasse of grave concern to us all and its causes must be thoroughly examined.
We rejected the institutions’ 25th June proposals because of a variety of powerful reasons. The first reason is the combination of austerity and social injustice they would impose upon a population devastated already by… austerity and social injustice. Even our own SLA proposal (22nd June) is austerian, in a bid to placate the institutions and thus come closer to an agreement. Only our SLA attempted to shift the burden of this renewed austerian onslaught to those more able to afford it – e.g. by concentrating on increasing employer contributions to pension funds rather than on reducing the lowest of pensions. Nonetheless, even our SLA contains many parts that Greek society rejects.
So, having pushed us hard to accept substantial new austerity, in the form of absurdly large primary surpluses (3.5% of GDP over the medium term, albeit somewhat lower than the unfathomable number agreed to by previous Greek governments – i.e. 4.5%), we ended up having to make recessionary trade-offs between, on the one hand, higher taxes/charges in an economy where those who pay their dues pay through the nose and, on the other, reductions in pensions/benefits in a society already devastated by massive cuts in basic income support for the multiplying needy.
Let me say colleagues what we had already conveyed to the institutions on 22nd June, as we were tabling our own proposals: Even this SLA, the one we were proposing, would be extremely onerous to pass through Parliament, given the level of recessionary measures and austerity it entailed. Unfortunately, the institutions’ response was to insist on even more recessionary (aka parametric) measures (e.g. increasing VAT on hotels from 6% to 23%!) and, worse still, on shifting the burden massively from business to the weakest members of society (e.g. to reduce the lowest of pensions, to remove support for farmers, to postpone ad infinitum legislation that offers some protection to badly exploited workers).
The institutions new proposals, as expressed in their 25th June SLA/Prior Actions document, would make a politically problematic package – from the perspective of our Parliament – into a package that would extremely difficult to push through our Parliamentary caucus. But this is not all. It gets worse much worse than that once we take a look at the proposed financing package.
What makes it impossible to pass the institutions’ proposal through Parliament is the lack of an answer to the question: Will these painful measures at least give us a period of tranquillity during which to carry out the agreed reforms and measures? Will a shock of optimism counter the recessionary effect of the extra fiscal consolidation that is being imposed on a country that has been in recession for 21 consecutive quarters? The answer is clear: No, the institutions’ proposal is offering no such prospect.
This is why: The proposed funding for the next 5 months (see below for a breakdown) is problematic in a variety of ways:
First, it makes no provision for the state’s arrears, caused by five months of making payments without disbursements and of falling tax revenues as a result of the constant threat of Grexit that has been wafting in the air, so to speak.
Secondly, the idea of cannibalising the HFSF in order to repay the ECB’s SMP-era bonds constitutes a clear and present danger: These monies were earmarked, correctly, for strengthening Greece’s fragile banks, possibly through an operation that deals with their mountainous NPLs that eat into their capitalisation. The answer I have been given by senior ECB officials, whose name will remain unsaid, is that, if need be, the HFSF will be replenished to cope with the banks’ capitalisation needs. And who will do the replenishing? The ESM, is the answer I was given. But, and this is a gigantic but, this is not part of the proposed deal and, moreover, it could not be part of the deal as the institutions have no mandate to commit the ESM in this manner – as I am sure Wolfgang will remind us all. And, moreover, if such a new arrangement could be made, why then is our sensible, moderate, proposal of a new ESM facility for Greece that helps shift SMP liability from the ECB to the ESM not discussed? The answer “we will not discuss it because we will not discuss it” will be very hard for me to convey to my Parliament, together with another package of austerity.
Thirdly, the proposed disbursements’ schedule is a minefield of reviews – one per month – that will ensure two things. First, that the Greek government will be immersed every day, every week in the review process for five long months. And well before these five months expire, we shall enter into another tedious negotiation over the next program – since there is nothing in the institutions’ proposal capable of inspiring even the faintest of hopes that at the end of this new extension Greece can stand on its own two feet.
Fourthly, given that it is abundantly clear that our debt will remain unsustainable by the end of the year, and that market access will remain as distant then as it is now, the IMF cannot be counted upon to disburse its share, the 3.5 billion that the institutions are counting as part of the funding package on the table.
These are solid reasons why our government does not consider it has a mandate to accept the institutions’ proposal or to use its majority in Parliament in order to push it through and onto the statutes.
At the same time, we do not have a mandate to turn down the institutions’ proposals either, cognizant of the critical moment in history we find ourselves in. Our party received 36% of the vote and the government as a whole commanded a little more than 40%. Fully aware of how weighty our decision is, we feel obliged to put the institutions’ proposal to the people of Greece. We shall endeavour to spell out to them fully what a Yes to the Institutions’ Proposal means, to do the same regarding a No vote, and then let them decide. For our part we shall accept the people’s verdict and will do whatever it takes to implement it – one way or another.
Some worry that a Yes vote would be a vote of no confidence in our government (as we shall be recommending a No vote), in which case we cannot promise to the Eurogroup that we shall be in a position to sign and implement the agreement with the institutions. This is not so. We are committed democrats. If the people gives us a clear instruction to sign up on the institutions’ proposals, we shall do whatever it takes to do so – even if it means a reconfigured government.
Colleagues, the referendum solution is optimal for all, given the constraints we face.
On the question that will be put to the Greek people, much has been said about what it should be. Many of you tell us, advise us, instruct us even, that we should make it a Yes or No question on the euro. Let me be clear on this. First, the question was formulated by the Cabinet and has just been passed through Parliament – and it is “Do you accept the institutions’ proposal as it was presented to us on 25th June in the Eurogroup?” This is the only pertinent question. If we had accepted that proposal two days ago, we would have had a deal. The Greek government is now asking the electorate to answer the question you put it to me Jeroen – especially when you said, and I quote, “you can consider this, if you wish, a take or leave it proposal”. Well, this is how we took it and we are now honouring the institutions and the Greek people by asking the latter to deliver a clear answer on the institutions’ proposal.
To those who say that, effectively, this is a referendum on the euro, my answer is: You may very well say this but I shall not comment. This is your judgement, your opinion, your interpretation. Not ours! There is a logic to your view but only if there is an implicit threat that a No from the Greek people to the institutions’ proposal will be followed up by moves to eject Greece, illegally, out of the euro. Such a threat would not be consistent with basic principles of European democratic governance and European Law.
To those who instruct us to phrase the referendum question as a euro-drachma dilemma, my answer is crystal clear: European Treaties make provisions for an exit from the EU. They do not make any provisions for an exit from the Eurozone. With good reason, of course, as the indivisibility of our Monetary Union is part of its raison d’ etre. To ask us to phrase the referendum question as a choice involving exit from the Eurozone is to ask us to violate EU Treaties and EU Law. I suggest to anyone who wants us, or anyone else, to hold a referendum on EMU membership to recommend a change in the Treaties.
It is time to take stock. The reason we find ourselves in the present conundrum is one: Our government’s primary proposal to you and the institutions, which I articulated here in the Eurogroup in my first ever intervention, was never taken seriously. It was the suggestion that common ground be created between the prevailing MoU and our new government’s program. For a fleeting moment, the 20th February Eurogroup statement raised the prospect of such common ground – as it made no reference to the MoU and concentrated on a new reform list by our government that would be put to the institutions.
Regrettably, immediately after the 20th of February the institutions, and most of colleagues in this room, sought to bring the MoU back to the centre, and to reduce our role in marginal changes within the MoU. It is as if we were told, to paraphrase Henry Ford, that we could have any reform list, any agreement, as long as it was the MoU. Common ground was thus sacrificed in favour of imposing upon our government a humiliating retreat. This is my view. But it is not important now. Now it is up to the Greek people to decide.
Our task, in today’s Eurogroup, ought to be to pave the ground for a smooth passage to the referendum of 5th July. This means one thing: that our loan agreement be extended by a few weeks so that the referendum takes place in conditions of tranquillity. Immediately after 5th July, if the people have voted Yes, the institutions’ proposal will be signed. Until then, during the next week, as the referendum approaches, any deviation from normality, especially in the banking sector, will be invariably interpreted as an attempt to coerce Greek voters. Greek society has paid a hefty price, through huge fiscal contraction, in order to be part of our monetary union. But a democratic monetary union that threatens a people about to deliver their verdict with capital controls and bank closures is a contradiction in terms. I would like to think that the Eurogroup will respect this principle. As for the ECB, the custodian on our monetary stability and of the Union itself, I have no doubt that, if the Eurogroup takes a responsible decision today to accept the request for an extension of our loan agreement that I am now tabling, it will do what it takes to give the Greek people a few more days to express their opinion.
Colleagues, these are critical moments and the decisions we make are momentous. In years to come we may well be asked “Where were you on the 27th of June? And what did you do to avert what happened? At the very least we should be able to say that: We gave the people who live under the worst depression a chance to consider their options. We tried democracy as a means of breaking a deadlock. And we did what it took to give them a few days to do so.
POSTSCRIPT – The day the Eurogroup President broke with the tradition of unanimity and excluded Greece from a Eurogroup gathering at will
Following my intervention (see above) the Eurogroup President rejected our request for an extension, with the support of the rest of the members, and announced that the Eurogroup would be issuing a statement placing the burden of this impasse on Greece and suggesting that the 18 ministers (that is the 19 Eurozone finance ministers except the Greek minister) reconvene later to discuss ways and means of protecting themselves from the fallout.
At that point I asked for legal advice, from the secretariat, on whether a Eurogroup statement can be issued without the conventional unanimity and whether the President of the Eurogroup can convene a meeting without inviting the finance minister of a Eurozone member-state. I received the following extraordinary answer: “The Eurogroup is an informal group. Thus it is not bound by Treaties or written regulations. While unanimity is conventionally adhered to, the Eurogroup President is not bound to explicit rules.” I let the reader comment on this remarkable statement.
For my part, I concluded as follows:
Colleagues, refusing to extend the loan agreement for a few weeks, and for the purpose of giving the Greek people an opportunity to deliberate in peace and quiet on the institutions’ proposal, especially given the high probability that they will accept these proposals (contrary to our government’s advice), will damage permanently the credibility of the Eurogroup as a democratic decision making body comprising partner states sharing not only a common currency but also common values.
PRESS CONFERENCE PRESENTATION IMMEDIATELY AFTER THE 27th JUNE 2015 EUROGROUP MEETING
Fukushima’s still radiating, self-perpetuating, immeasurable, and limitless, like a horrible incorrigible Doctor Who monster encounter in deep space.
Fukushima will likely go down in history as the biggest cover-up of the 21st Century. Governments and corporations are not leveling with citizens about the risks and dangers; similarly, truth itself, as an ethical standard, is at risk of going to shambles as the glue that holds together the trust and belief in society’s institutions. Ultimately, this is an example of how societies fail.
Tens of thousands of Fukushima residents remain in temporary housing more than four years after the horrific disaster of March 2011. Some areas on the outskirts of Fukushima have officially reopened to former residents, but many of those former residents are reluctant to return home because of widespread distrust of government claims that it is okay and safe.
Part of this reluctance has to do with radiation’s symptoms. It is insidious because it cannot be detected by human senses. People are not biologically equipped to feel its power, or see, or hear, touch or smell it (Caldicott). Not only that, it slowly accumulates over time in a dastardly fashion that serves to hide its effects until it is too late.
Chernobyl’s Destruction Mirrors Fukushima’s Future
As an example of how media fails to deal with disaster blowback, here are some Chernobyl facts that have not received enough widespread news coverage: Over one million (1,000,000) people have already died from Chernobyl’s fallout.
Additionally, the Rechitsa Orphanage in Belarus has been caring for a very large population of deathly sick and deformed children. Children are 10 to 20 times more sensitive to radiation than adults.
Zhuravichi Children’s Home is another institution, among many, for the Chernobyl-stricken: “The home is hidden deep in the countryside and, even today, the majority of people in Belarus are not aware of the existence of such institutions” (Source: Chernobyl Children’s Project-UK).
full article at source: http://www.counterpunch.org/2015/06/15/whats-really-going-on-at-fukushima/