Published time: February 06, 2015 07:10
The 2015 Greek tragedy is a sorry (financial) remix of the Trojan War. But now the troika (ECB, EC, IMF) has replaced Greece, and Greece is the new Troy.
It is now crystal clear the ECB will pull no punches to turn Greece into a European failed state. The rationale: others – from Spain to even, in the near future, France – must not entertain funny ideas. Toe the austerity line, or we’ll get medieval on you.
It was so predictable that the destiny of Athens – and in fact the euro – would ultimately rest in the hands of ECB Governor Mario ‘Master of the Universe’ Draghi, purveyor of the latest QE which in thesis will grant an austerity-ravaged Europe a little extra time to pursue ‘reforms’.
Some background is essential. The troika sold Greece an economic racket, but it’s the Greek people that are paying the price. Essentially, Greece’s public debt went from private to public hands when the ECB and the IMF ‘rescued’ private (German, French, Spanish) banks. The debt, of course, ballooned. The troika intervened, not to save Greece, but to save private banking.
The ECB bought public debt from private banks for a fortune, because the ECB could not buy public debt directly from the Greek state. The icing on this layer cake is that private banks had found the cash to buy Greece’s public debt exactly from…the ECB, profiting from ultra-friendly interest rates. This is outright theft. And it’s the thieves that have been setting the rules of the game all along.
Where’s our money?
The result is that Athens is now broke. Greek Finance Minister Yanis Varoufakis at least embarked on his European tour with a sound proposal; the ECB could move €1.9 billion of profit on the back of Greek bonds; and then release other €10 billion in short-term state obligations, as well as open an emergency line to banks. From the beginning, the key point for Varoufakis was to open the way to renegotiate the €240 billion of the troika ‘rescue’ plan.
ECB hawks – as in Errki Liikanen from Finland – barred these options from the outset, insisting that without a comprehensive agreement, as in total Greek surrender, not a single euro will go to Athens.
What a drag for Prime Minister Tsipras and for Varoufakis – to embark on an European tour as supplicant beggars facing a sterling collection of silky mobsters, including EC president Jean-Claude Juncker and president of the European Council, warmonger Donald Tusk.
Next week there may be an extraordinary meeting of the Eurogroup, ahead of a sparks-will-fly European summit in Brussels on February 12.
The bottom line: it does not look good.
Varoufakis tried to put a brave face, continuing to rule out a Grexit as “hugely detrimental to Greece.” More detrimental would be in fact the Syriza party totally capitulating to the neoliberal Masters of the Universe. This will ensure Greek depression will go on forever. And yes, eventually, the fascist Golden Dawn may accede to power.
Varoufakis, in his press conference with German finance minister Wolfgang Schauble in Berlin, even as he agreed with 67 percent of the current ‘plan’, stressed – soundly – it does not tackle the excesses of corruption and rent-seeking in Greece; and everything is all about debt repayments, not putting the Greek economy back into shape.
For his part, Schauble, predictably, issued a thinly veiled threat of an “uncertain future” without a bailout program. Schauble’s now famous “we agree to disagree” was in fact hardball enveloped in velvet.
There is no evidence as it stands that a complex negotiation of at least a few months will ensue, as Athens tries to restructure how to deal with the troika. The ECB is now tacitly playing the game that Greece is essentially doomed. Ergo, the ECB is voting down Syriza, and actually supporting fascist Golden Dawn. That’s central bank ‘democracy’ for you.
Bomb Frankfurt, anyone?
So in the end it breaks down to this; without ECB cash – at least some cash by the end of the month – Greece risks going back to the drachma without even firing a shot. And yet that’s exactly what legions across Europe are absolutely rooting for. In parallel, no wonder – from Lisbon to Rome – rumblings multiply that if the ECB would have done that to a relatively well weaponized nation, the tanks would be out in the streets (but to do what? Bomb Frankfurt?)
Varoufakis insists, “One thing we will not do is capitulate.” That would translate, essentially, into a Greek default. We’re not there – yet. In the very short term, Draghi also knows that were Athens to get some of the cash it needs short term, there would be war against the Bundesbank. It won’t happen; the ECB and the Bundesbank are partners in crime.
Once again; both the ECB and the Bundesbank came to the conclusion there is no risk of contagion even with a Grexit. So the ‘strategy’ won’t wobble; crush Greece and all’s well that ends well – as in the troika’s terminator economics trampling whole countries underfoot.
Beware of Masters of the Universe dispensing smiles. Draghi and the Zegna-clad ECB goons may dispense all the smiles in the world, but what they are graphically demonstrating once again is how toxic central banking is now enshrined as a mortal enemy of democracy.
Pepe Escobar’s latest book is Empire of Chaos.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.