Submitted By MIKE SPINDELL
Yesterday I submitted a post “The Austerity Conspiracy and the Greek Banking Crisis” in which I tried to give context to this manufactured “crisis” by looking at the concept of “austerity” that is at its core. Today Joseph Stiglitz ,the Nobel Laureate Economist, wrote an article “Europe’s Attack on Greek Democracy” , which I think is a must read if you are at all interested in the plight of the Greek people and their democratic institutions. It begins:
“The rising crescendo of bickering and acrimony within Europe might seem to outsiders to be the inevitable result of the bitter endgame playing out between Greece and its creditors. In fact, European leaders are finally beginning to reveal the true nature of the ongoing debt dispute, and the answer is not pleasant: it is about power and democracy much more than money and economics.
Of course, the economics behind the program that the “troika” (the European Commission, the European Central Bank and the International Monetary Fund) foisted on Greece five years ago has been abysmal, resulting in a 25 percent decline in the country’s GDP. I can think of no depression, ever, that has been so deliberate and had such catastrophic consequences: Greece’s rate of youth unemployment, for example, now exceeds 60 percent.
It is startling that the troika has refused to accept responsibility for any of this or admit how bad its forecasts and models have been. But what is even more surprising is that Europe’s leaders have not even learned. The troika is still demanding that Greece achieve a primary budget surplus (excluding interest payments) of 3.5 percent of GDP by 2018.
Economists around the world have condemned that target as punitive, because aiming for it will inevitably result in a deeper downturn. Indeed, even if Greece’s debt is restructured beyond anything imaginable, the country will remain in depression if voters there commit to the troika’s target in the snap referendum to be held this weekend.
In terms of transforming a large primary deficit into a surplus, few countries have accomplished anything like what the Greeks have achieved in the last five years. And, though the cost in terms of human suffering has been extremely high, the Greek government’s recent proposals went a long way toward meeting its creditors’ demands. We should be clear: almost none of the huge amount of money loaned to Greece has actually gone there. It has gone to pay out private-sector creditors — including German and French banks. Greece has gotten but a pittance, but it has paid a high price to preserve these countries’ banking systems. The IMF and the other “official” creditors do not need the money that is being demanded. Under a business-as-usual scenario, the money received would most likely just be lent out again to Greece.”
And there it is. This “Troika” of Banks has been using “austerity” as a financial scam to enrich private sector creditors. The idea is not to protect all the citizens of the EU, but only the wealthy elites. Stiglitz goes on to show why this is a specific attack upon democracy in Greece, aimed at the Left Wing government Greece elected because the citizenry rose up against the reality of what austerity is all about. Please follow the link to the rest of Mr. Stiglitz’ article and let me know if it makes you as mad as I am about this “austerity” scam from the European elite.