U.S. political economists Michael Hudson and Bill Black tell The Real News Network that Western financial institutions are keen to bail out Greece because if they don’t, the country’s existing creditors—other Western financial institutions—will fail to recover money they previously lent to Greece.
The experts say the ongoing bailout scheme has turned Greece into a transfer site for international wealth, while stripping the country of its publicly owned assets and driving it into a hole of poverty and debt that is inescapable under the European Union’s current policies.
Black, who teaches economics and law at the University of Missouri-Kansas City and served as executive director of the Institute for Fraud Prevention from 2005-2007, put it this way:
The same people are getting bailed out that have been getting bailed out from the beginning of the Greek crisis, and that is foreign banks. So this money just moves in sort of an elaborate circle from the Troika, which is the European Commission, the European Central Bank, and the IMF, through the Greek government, through the Greek banks, and then they pay the foreign creditors. And they pay them just enough that they don’t have to recognize a loss for accounting purposes.
As Michael will explain, of late the big investors tend to be American hedge funds, as opposed to what used to be primarily French banks.