Greece has been downgraded by the ratings agency Fitch following the approval of its latest bailout deal.
The agency now classes Greek government debt as C, down from a CCC rating.
The downgrade was triggered by the deal between Greece and the banking industry, under which the banks will swap their existing bonds for new debt worth much less.
Fitch says the exchange, if completed, would constitute a "distressed debt exchange".
What did Argentina’s government do wrong? In the months leading to collapse it bowed to all the bankers and IMF-mandated measures and “recipes”, which were actually the very cause of collapse: Argentina was loaned far more than it could pay back…. And the banker knew it!
Successive governments since then have continued to be functional to banker interests by rolling over debt 30 to 40 years, aggregating huge interest and in 2006 paying the full debt to the IMF – almost US$10 billion in full, cash and in US dollars (sole entity given most-favoured creditor status).
Same vultures circling Greece
Today, Greece is confronted with a similarly tough decision. Either it keeps its sovereignty, or it capitulates to the “Vulture Troika” – the European Central Bank, European Commission and International Monetary Fund – who work for the Bankers, not the People.
Not surprisingly, today we find that Greece too has a Trilateral Commission Rockefeller/Rothschild man at the helm: Lucas Papademos who is doing the same things Argentina did in 2001/2.
I experience pleasure and pains, and pursue goals in service of them, so I cannot reasonably deny the right of other sentient agents to do the same - Steven Pinker
Argentina had a problem in 2001 but it was a local problem and was at a time when world economic growth was substantial and before the easy oil had peaked.
Greece has a problem now, post peak oil, that is local only insofar as they are a weak point in a global system teetering on collapse.
Greece will benefit greatly in the long run by defaulting now. Just like Cuba, they will get a head start in the process of dealing with post-peak realities.
"We fail to mandate economic sanity because our brains are addled by....compassion." (Garrett Hardin)
Fascinating graph of Greek opinion polls on the above page.
The orange line is the centre right Greek equivalent of the tories, and the dark blue line is PASOK, which is something like a sold-out labour party. These two parties make up most of the current government, and they will get mashed up badly at the election in April.
The green line is the radical nationalist right wing People's Orthodox Rally. The yellow line is the communist party.
Who is gaining? The burgundy line is the coalition of the radical left and the light blue line which is taking off hockey-stick style is a new eco-socialist party that split from a previous group.
That means something like 70% of the electorate now supports far left or eco-socialist parties. The far right is losing ground. The centre-right is losing ground because it is part of the hated government.
"We fail to mandate economic sanity because our brains are addled by....compassion." (Garrett Hardin)
Job losses in the tens of thousands, drastic wage cuts, and working even further into old age - just some of the challenges that would loom in the UK if the government had to introduce austerity cuts on the scale currently facing the Greeks.
For BBC Radio 4's Broadcasting House - the Sunday Times Economics Editor, David Smith, was asked to imagine what would happen if Britain had Greece's problems.
With what's happening in Greece right now, the best solution for the Greek people is an outright socialist revolution in order that their democratic will be obeyed by their state. I suggest a socialist revolution as being the best outcome because the privations that will hit them from a default (which would be the inevitable outcome of not swallowing the bitter EU pill) would require for the people to perceive, unambiguously, that the pain is being shared equitably across their society and also that the population is mobilised for a common good. The Greek people would need to turn back to the land in an organised and mass fashion for a while in order to simply feed themselves. In time (probably a long time) they could rebuild their society from the ashes of its collapse. At the moment, however, the EU is imposing all of the pain, is imposing it inequitably and is demanding that the Greeks lose sovereignty over their own country into the bargain. This is surely politically unsustainable.
The Greek people, if they manage to kick out their current puppet government, are facing a stark choice; poor and free or poor and slaves? I know which I would choose if I was a Greek. The alternative to the above is that they undergo a fascist revolution because some arsehole strongman promises them bread just so long as they succumb to his dictat.
Now, I’ve heard a lot lately about how the Greeks are a nation of lazy people. However, whether or not some or all Greeks are lazy is beside the point. The fact is, German banks lent huge sums of funny-money into the Greek economy because it suited them to do so. It’s also a fact that some Greeks took the funny money because it suited them to do so. Many Greeks, though, like many people here in the UK, were simply forced to attend the debt-fuelled party whether they wanted to attend or not because this was the new game in town and anyone who didn't play was economically penalised. This kind of game has, of course, been repeated all over the Western world.
What should have happened when this crisis hit is that those Greek banks who borrowed too much, those Greek citizens who borrowed too much and those German and other international banks who lent too much should have all been left to go to the wall (with the proviso of the State intervening, insofar as it could afford it, to ameliorate the worst privations of individuals via the state benefit systems). Instead, all over Europe, generally, and all over Greece, in particular, private debts have been monetized onto every single tax payer. In other words, private debts have been transferred to sovereign states. This has been done without the permission of the people and the consequences of it hitting Greece right now have also been imposed on them without their permission.
Now, it's almost certainly the case that if the Greeks don't play ball, they will suffer at least as much as they would if they accept the EU terms. But, at least if they stick two fingers up, they will suffer on their own terms as a free people. This so called "bailout" is really a bailout of German and French banks and the Greeks are now expected to be the sacrificial lambs on the alter of that bailout.
The other line I hear trotted out regularly is that of the reluctance of Greeks to pay their taxes. However, whilst the tax evasion of the Greeks is and has been a major problem for Greece, it has nothing to do with this crisis. If it did, this crisis would have occurred long before now. Instead, it’s due to the huge amount of unsustainable credit thrown at the Greeks since joining the Euro and, crucially, the EU project engineers in Germany and France wilfully turning a blind eye to Greece's finances when they joined because it politically suited them. Also, I should add, the position of the German elites, holding their noses in disgust at the financial profligacy of the Greek banking system is, frankly, rank hypocrisy. The German banks played exactly the same game as the Greek banks. Only, instead of shitting in their own back yards, they shit in the back yards of their New Southern European Friends. Thus, German banks played the same game of insane lending as anyone else; they just did it by proxy. Now, German and French politicians wish to burn Greece to protect their own banking systems from the consequences of their own previous profligacy. This has got absolutely **** all to do with "saving" Greece.
I'm not actually ultimately blaming the bankers. Or, at least, I am not suggesting that they could ever have been expected to do anything other than what they did given the insane deregulation of the financial sector that took place. Rabid dogs are what they are, after all. No, I am blaming politicians. In this particular case, EU politicians though, it has to be said, this game was played by much of the political establishment of the Western world as a response to Chindians coming off the hills and making tellys for a tenner a week.
On a more general note, from the conversations I have had with some Greek acquaintances of mine, it would seem the Greeks have always had a somewhat loose relationship with their state obligations for pretty much ever. Consequently, they were always a bit of an economically "backward" nation, bumbling along in their own unique fashion with the odd crisis thrown in along the way. Basically, they made enough money from humus and tourism to keep on trucking. Until, that is, the EU came along and promised them a shiny new future where the money would fall like rain from international lenders. And just look where it’s got them.
The Greek crisis was baked into the cake of an EU project that was willing to turn a blind eye to fundamental differences in the both the cultures and economies of these countries all in order to fulfil a European federalist wet dream. That dream has well and truly turned into a nightmare now.
I repeat, Greece should default. This would undoubtedly have an impact on every Greek citizen including those who acquired no debt whatsoever. However, that's just the way it goes. It would also have a major impact on those banks overseas (the German banking system being heavily implicated here). That's also just the way it goes. Instead, democratic accountability of politicians and moral accountability of individuals for their own mistakes is dead in Greece. Indeed, it's dead across the Western capitalist world.
The economic and social outcome of this mess is going to be on the Greek plate for years to come, whichever way it goes. They will get organic or imposed austerity, but they will get austerity for sure. The point is, they need to be responsible for that outcome and, currently, they are being denied the opportunity to take that responsibility. If Europe wants to avoid the rise of extremism, its current elites had better choose a different path to the one they have currently taken with respect to Greece.
If the Greeks are given the full facts and choose to swallow the EU pill, so be it. If, on the other hand, after hearing the full facts, they tell their government that they can't implement the EU deal, then so be it. The cards will have to fall where they may with all of the consequences that could ensue for all of the rest of us, even here in the UK. We cannot deny the Greeks their right of sovereignty over their own nation. Or, at least, not without political consequences which, over the longer term, could be even more devastating for the rest of us than any economic collapse that might occur as a result of default.
Anyway, I’m rambling badly……
Last edited by Little John on 01 Mar 2012, 22:26, edited 6 times in total.
stevecook172001 wrote:What should have happened when this crisis hit is that those Greek banks who borrowed too much, the Greek citizens who borrowed too much, the German and other international banks who lent too much should have all been left to go to the wall (with the proviso of the State intervening, insofar as it can afford to, to ameliorate the worst privations of individuals via the usual state benefit systems).
Precisely what I said when it was announced over here that unsecured debts were being guaranteed.
Bankers couldn't believe their luck. Some were even prepared to take a hit.
A local hotel went into administration last year. Local businesses got 15¢ in the euro for their bills (Guinness got paid in full of course...how else could it re-open under new management ). But this is exactly what should have happened - sell off the assets, distribute what's left.
But no. And these bondholders were rewarded with the collaboration of the Green Party. Let that be a lesson to you all.
I experience pleasure and pains, and pursue goals in service of them, so I cannot reasonably deny the right of other sentient agents to do the same - Steven Pinker
stevecook172001 wrote:With what's happening in Greece right now, the best solution for the Greek people is an outright socialist revolution in order that their democratic will to be obeyed by their state.
Is socialism in just one country possible? I'm doubtful, particularly in these interconnected days, with ferocious predators all around.
Greece will never be allowed to poison the world with absolute default, anti-globalisation and socialism. Can't risk those things catching on.
stevecook172001 wrote:With what's happening in Greece right now, the best solution for the Greek people is an outright socialist revolution in order that their democratic will to be obeyed by their state.
Is socialism in just one country possible? I'm doubtful, particularly in these interconnected days, with ferocious predators all around.
Greece will never be allowed to poison the world with absolute default, anti-globalisation and socialism. Can't risk those things catching on.
Never be allowed by who? Greece is a democracy, and it is part of the EU constitution that all members must be democracies. If it democratically elects a "revolutionary" far-left government which chooses to default, leave the euro (maybe remain in the EU, maybe leave), then what can the world powers and corporations do to stop them?
Invade? Suspend the democratic process in Greece?
If Cuba can do "socialism", so can Greece.
"We fail to mandate economic sanity because our brains are addled by....compassion." (Garrett Hardin)
stevecook172001 wrote:With what's happening in Greece right now, the best solution for the Greek people is an outright socialist revolution in order that their democratic will to be obeyed by their state.
Is socialism in just one country possible? I'm doubtful, particularly in these interconnected days, with ferocious predators all around.
Greece will never be allowed to poison the world with absolute default, anti-globalisation and socialism. Can't risk those things catching on.
Never be allowed by who? Greece is a democracy, and it is part of the EU constitution that all members must be democracies.
Ah, I see you are an idealist. A democracy? Italy too? So who is heading the Italian and Greek governments? Elected politicians? It is also a bit rich the EU constitution requiring all members must be democracies, given the lack of democracy within the EU institutions - and the efforts to sap power from the nation states into the EU itself.
UndercoverElephant wrote:If it democratically elects a "revolutionary" far-left government which chooses to default, leave the euro (maybe remain in the EU, maybe leave), then what can the world powers and corporations do to stop them?
It is possible to destroy a country many ways. The EU, corporate bodies and international institutions can apply endless sanctions of various kinds. And if Greece adopts its own currency that can be trashed. But, these days, the possibilities are almost endless. See history books for details.
UndercoverElephant wrote:If Cuba can do "socialism", so can Greece.
Cuba is an example of how a state is NOT left alone to do its own thing. Yes, its survival is remarkable. But consider what the country has had to go through: attempts on Castro's life, the multiple efforts to bring the regime down, the media / human rights war, the long list of sanctions. Plus Cuba will probably soon be a playground for the rich (my prediction). I wouldn't count on a much more interconnected state like Greece being able to follow Cuba's example.
stevecook172001 wrote:With what's happening in Greece right now, the best solution for the Greek people is an outright socialist revolution in order that their democratic will to be obeyed by their state.
Is socialism in just one country possible? I'm doubtful, particularly in these interconnected days, with ferocious predators all around.
Greece will never be allowed to poison the world with absolute default, anti-globalisation and socialism. Can't risk those things catching on.
Anything is possible.
We constantly get told all sorts of shit is impossible until, sudennly, it is.
At which point everyone wonders why the hell it didn't happen sooner. After all, there's millions of us and only a few hundred of them.
All it takes is for enough people to get sufficiently desperate that they begin to realise they have nothing left to lose. The Greeks are just a little closer to that point than the rest of us.
energy-village wrote:
Is socialism in just one country possible? I'm doubtful, particularly in these interconnected days, with ferocious predators all around.
Greece will never be allowed to poison the world with absolute default, anti-globalisation and socialism. Can't risk those things catching on.
Never be allowed by who? Greece is a democracy, and it is part of the EU constitution that all members must be democracies.
Ah, I see you are an idealist. A democracy? Italy too? So who is heading the Italian and Greek governments? Elected politicians?
Nope, but that isn't going to stop the general election in Greece in 2012. The "technocrat" current leader of Greece was put there temporarily, specifically to get Greece past the next bailout - and that was decided by a majority of the Greek parliament (but after the last election). Greece is still a democracy, but that democracy is currently threatened in ways nobody expected it to be. The Greek people are well aware of this, and look like they will vote accordingly in April. If, for example, they were to elect a far left government which was determined to default, no european power could stop them.
It is possible to destroy a country many ways. The EU, corporate bodies and international institutions can apply endless sanctions of various kinds.
Sanctions against Greece because the people elected a far left government? Sanctions because it defaulted?? This is GREECE we are talking about, not Syria.
And if Greece adopts its own currency that can be trashed.
That will suit the Greeks just fine. The more their currency is trashed, the more people will want to go on holiday there.
Cuba is an example of how a state is NOT left alone to do its own thing. Yes, its survival is remarkable. But consider what the country has had to go through: attempts on Castro's life, the multiple efforts to bring the regime down, the media / human rights war, the long list of sanctions. Plus Cuba will probably soon be a playground for the rich (my prediction). I wouldn't count on a much more interconnected state like Greece being able to follow Cuba's example.
Cuba is right next to the US. Europe is not America. Greece is not Cuba.
The problem with clamping down on a communistic Greece in the same way the US clamped down on Cuba is that there is would be no public support in the other European countries for that action. If anything, the majority of the european public is likely to support the Greeks.
I am not being idealistic here. I honestly believe that real power is shifting and that thing are becoming possible which did not seem possible only a few years ago.
"We fail to mandate economic sanity because our brains are addled by....compassion." (Garrett Hardin)
). But this is exactly what should have happened - sell off the assets, distribute what's left.